European leaders hatch aid plan for banks in crisis
European leaders, rushing to craft a credible response before fearful world markets reopen, pledged on Sunday to pump public money into banks battered by the worst financial crisis since the 1930s.
"This needs concrete measures and unity -- that's what we have today," French President Nicolas Sarkozy, who hosted an emergency meeting of leaders from the 15 euro zone countries plus Britain, told a news conference.
According to a document circulated during the summit, two key things agreed by leaders were the commitments to provide capital and insure or directly buy into new debt issues.
Sarkozy said governments were ready to take stakes in banks and that details would be announced at national level, to start with in Paris, Berlin and Rome, on Monday.
"This is not a gift to banks but to help them function."
According to the document circulated, a draft statement, the leaders pledged to help or directly subscribe to debt-raising by banks for periods of up to five years to complement efforts by the European Central Bank to unfreeze inter-bank lending markets.
European Commission President Jose Manuel Barroso confirmed that point at the news conference held with Sarkozy and others.
Sarkozy said the summit showed that Europe was able despite myriad national borders to respond collectively to the crisis, which spread from the United States more than a year ago but has hit fever pitch in recent weeks.
Officials had suggested action rather than rhetoric would emerge from a gathering that also involved European Central Bank President Jean-Claude Trichet.
"If market confidence is not restored this weekend, it's game over," said Marco Annunziata, chief economist for UniCredit, an Italian bank which is among many whose shares have been hurt in panic-stricken stock markets.
The American Standard & Poor's 500 index tumbled more than 18 percent last week, its worst weekly fall on record. European stocks plunged 22 percent and Tokyo's Nikkei crashed 24 percent.
Money markets, less visible to the public, are essentially on life support and dependent on regular, massive injections of emergency liquidity from central banks across the globe because banks themselves will not lend to each other as they used to.
The Paris meeting was hastily arranged by Sarkozy on the heels of a G7 summit of rich nations in Washington that offered no concrete, collective action but promised to do whatever was needed to unfreeze credit markets.
NO SINGLE RESCUE POT?
British Prime Minister Gordon Brown, whose country has not adopted the euro, was invited to Paris because the euro zone was interested in the rescue plan announced in London last week.
Brown, present for the first part of the meetings only, told a news conference before leaving the Elysee presidential palace:
"I believe that we will see over a few days worldwide action that will make people see that confidence in the banking system can be restored."
Britain's rescue plan makes available 50 billion pounds ($86 billion) of taxpayers' money for injection into its banks and, crucially, calls for underwriting interbank lending.
What emerged from the Paris summit looked similar to the British plan in many respects, though no figures were mentioned and it was not immediately clear whether governments in the euro zone were planning to underwrite interbank lending.
On Saturday, media reports said Germany was readying a rescue package that could be worth up to 400 billion euros, including the injection of equity capital worth "double digit" billions into its banks and guarantees for interbank lending.
In addition to Brown and the leaders of the euro countries, the summit involved Trichet, European Commission President Jose Manuel Barroso and Jean-Claude Juncker, Luxembourg prime minister and chief spokesman for euro zone finance ministers.
In London meanwhile, big British banks were in talks with government officials and regulators and were likely to announce plans to recapitalize early on Monday, according to a person familiar with the matter.
The talks there were to determine how much capital each bank needs from the 50 billion pounds ($86 billion) offered by the government, said the source, who declined to be identified.
(Writing by Brian Love, with reporting by Francois Murphy, Noah Barkin, Giuseppe Fonte, Anna Willard and Crispian Balmer, plus Andreas Moeser and Dave Graham in Berlin and James Mackenzie in Washington)
(Editing by Ralph Boulton)
China prepares itself to be a responsible power
TOKYO, Oct. 12 (Xinhua) -- China has become the center of East Asia thanks to its tenacious drive for reform and opening up over the past 30 years, and how to play its due role in the region is a major task China is charged with in the coming years, said a senior Japanese newsman in an interview with Xinhua.
Kiyoshi Nakagawa, who heads the international department of Kyodo News, has found himself linked with China by an unbreakable bond since the early 1980s, when China had just adopted the policy of reform and opening up and foreigners began to be allowed entry into China's Tibet Autonomous Region.
"In the early 1980s, the Japanese media focused mostly on China's domestic affairs and Japan-China relations, notably its leaders," said Nakagawa, who, as a Kyodo News reporter, went into Tibet with a Japanese mountain climbing team in 1981 and later served as the agency's bureau chief in China.
With the deepening of China's reform and opening up in the 1990s, the focus of Japanese news reports about China began to shift from its domestic affairs to the fields of economy and diplomatic relations, said the senior newsman, who has pursued a successful career in the press in sync with the process of China’s reform and opening up and thus become a witness to the changes in Japan's media reports about China.
"In the 21st century, with worldwide attention concentrated on its rise, China took the opportunity of the Beijing Olympics and set out to prepare itself to be a responsible power," he said.
The policy of reform and opening up has brought about profound changes in various aspect of China's society, Nakagawa said.
"What impresses me most, among others, is that young people in China have assumed an entirely new look in their way of thinking and their outlook on life, which are characterized by the enterprising spirit of constantly forging ahead," he said, adding that vigor and vitality are thus felt in every aspect of the Chinese society.
Concerning the effects exerted by the policy on Japan, Nakagawa said that Japan has profited greatly from China's enormous market, which involves 1.3 billion people.
"As a 'world factory' opening up to the world, China attracted hosts of Japanese enterprises with its cheap labor resources, which, in turn, invigorated Japan's industrial sector," he said.
"Economic exchanges and cooperation between the two countries laid a solid foundation for the improvement of bilateral political relations, and in this sense, China's reform and opening up has played a key role in promoting Japan-China relations," Nakagawa said.
The Kyodo News department chief, however, admitted that China's rapid economic progress prompted reflection on the current situation of Japan-China relations.
"Japan should view China's rise from an objective perspective, compete fairly and foster win-win cooperative relations with China," Nakagawa said.
"Only in this way could the two Asian powers coexist in harmony," he added.
On China's future development, Nakagawa said that China's development will wield great influence on East Asia, the Asian continent and the world at large.
Optimistic about China's future development, Nakagawa said the is looking forward to China's role as a responsible power in East Asia and the rest of the world as well.
http://timesofindia.indiatimes.com/World/UK/A_bankruptcy_every_five_minu...
LONDON: A British resident or business is declared insolvent every five minutes or so, according to an advocacy group.
Credit Action claims that the number of people seeking debt help has increased by more than a third in the past year, 104 properties are repossessed daily and the average household debt is 9,500 pounds, the 'Sky News' reported.
According to Managing Director of Capital Economics Roger Bootle, the era of easy credit is actually over.
"The financial landscape will never be the same again. We have passed through a major event which is on a par of much of what occurred in the 1920s and 30s leading up to the Great Depression.